Businesses in two different governments face different realities when their products (wine and cigars) are being challenged.
It’s easy to forget that the consumption of wine is not just a gustatory experience, but also a very real business. How big? According to the International Organisation of Vine and Wine, the world consumed 32,000,000,000 (32 billion) bottles of wine in 2015.
I’m guessing some of the vintners and farmers in the Aude region of France might be secret Donald Trump fans. Just like The Donald, they hold very strong opinions about a Hispanic neighbor to their south, believing that nothing good could come from that region.
The difference is the identity of the despised country. For Donald, it’s Mexico and Mexicans. For Aude farmers, it’s Spain and Spanish winemakers.
The Aude region runs along the northeastern border between Spain and France. Many Spanish winemakers ship their bulk wines through France to be distributed throughout Europe and worldwide.
Well, the folks in Aude don’t appreciate: 1) the Spanish wines being cheaper than wines from Aude, and 2) the Spanish wines being trucked over French roads. And so, the French winemakers took matters into their own hands.
In early April, as reported by Wine Spectator, “a 150-strong gang of irate French winemakers hijacked five tanker trucks and dumped their contents—90,000 bottles’ worth of Spanish bulk wine—all over the road.”
Although such activity is clearly illegal, witnesses to the great Spanish flood said the local gendarmes were present but did nothing. And, getting redress seems remote.
Under the rules of the European Union, the Spanish winemakers must bring their claim against the Aude in French court. So, perhaps the Spanish may feel the deck is stacked against them.
I’d guess the makers of premium cigars don’t feel any differently.
Like wine, cigars bring in big money. Twelve billion cigars are sold annually in the USA. Of those, about 3 percent are so-called premium cigars, that is, cigars that are hand-rolled, not machine made.
The U.S. Food & Drug Administration (FDA) recently determined that it has the right to regulate virtually all products in the tobacco industry, not just cigarettes.
Accompanying this decision is a new regulation that premium cigar makers believe is too onerous.
These new FDA rules begin in August: 1) only 18 year olds can buy tobacco products; 2) no more free samples; and, 3) products released after February 15, 2007 must be verified by the FDA before going to market – grandfathering older products into the new rules
It is the last rule that’s got premium cigar makers freaking out.
While all of the details are still being worked out, it looks like every time Macanudo or Cohiba wants to introduce a new size or style of cigar, it must submit the prototype to the FDA for its approval. This process could take months or years to complete, costing the manufacturer valuable sales time.
The premium cigar makers tried but failed to convince the FDA to exempt its products from this requirement. So, now they’re looking at their legal options which, fortunately for them, exceed what the Spaniards have available.
They hope to convince Congress to override the FDA. Of course, even if they succeed with the GOP controlled Congress will a Democratic president sign off on the legislation?
If they can’t get what they want in Washington, they are considering filing suit to halt or at least modify what the FDA wants to do.
Cigars or wine; USA or the EU – the joy of doing business can sometimes be a rocky road. ©